1099 NEC

[dew907]

I have a small LLC business where my wife and I are 50 / 50 partners. I received a 1099 NEC today. Usually I would split the income and expense on the Business page but now it just moves the income from one business to another back and forth. Confused.....any advice would be much appreciated. 

[DianeW777 · Accepted solution]

The Form 1099-NEC can be removed due to this experience. You can enter your cash sales without using the Form 1099-NEC if you choose. 

The income can be entered directly, without using the 1099-NEC . The following steps will help.

1. Sign into your TurboTax account > Select Wages & Income
2. Scroll to Self-Employment Income and Expenses > Edit/Add
3. Select Add/Edit beside the self-employment activity
4. Enter your Additional Income receipts for 2020 (see image below)
5. Retain your Form 1099-NEC with your files.  

Delete the Form 1099-NEC you previously entered. The IRS does not required the actual form entry, only that all income is included in your return.

If you prefer, you can also enter your email for notification of the update by clicking here,  then scrolling to 'please update here' to enter your email.

[dgtruong]

I worked at a start up company for a short period of time.  This company did not hold any of my tax and provided me with Form 1099 NEC.  I have to file SCHEDULE C.  This schedule C is about "Self-Employed"/Business. 

I don't have a business I was NOT self-employed.  How do I file this form 1099 NEC as Turbo Tax Deluxe directed me to fill out Schedule C for Profit or Loss from Business?

Is this earning from my 1099 NEC a Qualified Business Income ?

Thx

Davie

[ToddL99]

In the eyes of the IRS, you were "self-employed" - you earned money by working and the start-up company did not assume any responsibility as your employer. 

Since the start-up company paid you but did not withhold and pay Social Security and Medicare taxes on your behalf, you are considered to the the "employer". This makes you responsible for the full amount of those taxes.

Depending on the type of work you did, this income would qualify as "Qualified Business Income".

See "Professional Services” Guidance for the QBI Deduction Helps Define Specified Services for additional information.